Uber’s Toxic Corporate Culture May Not Be Its Biggest Problem
Business + Economy

Uber’s Toxic Corporate Culture May Not Be Its Biggest Problem

Tyrone Siu

With a very public rebuke of Uber’s corporate culture, newly installed president Jeff Jones has resigned after just six months.

In a statement to the tech website Recode, Jones said: “It is now clear … that the beliefs and approach to leadership that have guided my career are inconsistent with what I saw and experienced at Uber, and I can no longer continue as president of the ride sharing business.”

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It is not known how much compensation Jones is leaving on the table, but in corporate America that sort of parting shot is like giving the company the middle finger as you slam the door at headquarters. And it suggests that Jones, who left a behind a job as chief marketing officer of Target to join Uber last October, may see sticking with Uber as a career killer.

As further evidence of the abruptness of the departure, co-founder and CEO Travis Kalanick said in a message to staffers: “It is unfortunate that this was announced through the press” and implied that the reason for Jones’s exit was an earlier announcement that Uber is searching for a chief operating officer.

But the statement by Jones comes on the heels of multiple allegations of sexism and sexual harassment at Uber and the departures of two key executives tied to allegedly improper behavior. Late last month, Amit Singhal, senior vice-president for engineering, was let go for not revealing when he was hired that he had been booted out of Google over sexual harassment charges. Singhal told Kara Swisher of Recode that the allegation was not true.

Earlier this month, executive vice president for product and growth Ed Baker, who was said to have engaged in improper sexual behavior with an employee but not sexual harassment, also stepped down.

Since the start of the new year, the ubiquitous ride service – privately valued at about $69 billion – has been beset by one scandal after another

In a blog post on Feb. 19, Susan Fowler, a woman engineer at Uber chronicled what she called a strange and horrifying year in a culture she said is rife with sexual harassment, abetted by an unresponsive human resources department. The post went viral and reportedly riveted Silicon Valley.

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Uber CEO Kalanick then held a teary all-hands meeting at which he apologized for leading the company he co-founded to a point of such negativity and discord. He ordered an internal investigation and asked board member Ariana Huffington and former Attorney General Eric Holder to look into the allegations, including the complicity of HR.

In a post on Medium, another woman engineer at Uber, Aimee Lucido, called Fowler’s tale “disgusting and appalling and horrifying,” but not surprising since it is something she has been “shouting about” for years. But she said she was heartened by Kalanick’s response.

Then on Super Bowl Sunday, Kalanick got into a heated dispute with one of his own drivers, and the video went viral. Kalanick later apologized to the driver.

A “boys-gone-wild” culture may not be Uber’s biggest problem, though. In a story several days ago, Bloomberg wondered whether the Uber model can survive and whether it is really a model at all or “just a spectacularly successful case of regulatory arbitrage backed by Silicon Valley billions” since the eight-year-old company “doesn't pay labor taxes or make social security contributions … give sick leave or ensure a minimum wage. All it does is collect a 20-30 percent commission for connecting driver to passenger.”

Bloomberg says that in the first nine months of last year, Uber lost $2.2 billion on sales of $3.8 billion, and it suggests that projected losses of $3 billion in 2017 may actually be conservative. It says this “crazy cash burn” is taking place as Uber operates with the lowest labor rates it may ever know.